Integrated Resource Planning and the April Energy Engagement Series

April 14th, 2016

What happens when we approach energy access from a perspective of how to provide energy services instead of simply focusing on expanding the supply of kilowatt hours? Underserved populations require consideration of latent demand as well as supply options, but to do this, planners often have to change how they approach these issues.

At Practical Action and WRI’s most recent Energy Engagement Series event in Washington, DC,  Gilberto Jannuzzi talked about his work in Brazil delivering energy efficiency programs for low income urban households in Brazil. He’s a champion of Integrated Resource Planning (IRP), an energy planning tool which is able to evaluate both demand side and supply side resources to best meet future energy requirements of a region. What follows is a summary of our group discussion, though, if you’d like to see some of the handouts used for talking points, you might like to read those here.

IRP looks at the developmental needs of a country, the potential for energy supply that energy service providers can deliver, and the other resources available.  Integrated Resources Planning (IRP) is one tool that can help include these opportunities in an energy planning process.

The process for Integrated Resource Planning

The process for Integrated Resource Planning

At the top of this, you see the national plans set out by a government. Inside of this discussion a major part of IRP depends on setting parameters around what resources you are considering who you want to work with, etc. Our group discussed how this is often an area where the most advocacy needs to be done for disempowered groups, and it is also the area where planners really need to make sure that all voices are being heard. Once parameters are set, there is an attempt to connect the efforts of energy planners (listed along the left side inside this parameter box), and the developmental targets. Energy planning is pretty quantitative, and is within the comfort zone of the planners who are usually involved, but developmental targets are a more complex space, because they require stakeholder consultations, and inputs that come from outside the energy space. These two components are used to analyse how to use resources for given aims. In this way IRP shifts the conversation from one about how to increase kilowatt hours to how to better use existing resources.

IRP can be used to figure out how consumers will use energy, but how you determine the consumer patterns you want to have depends a lot on who is doing the IRP in the first place.

Another useful application of IRP is deciding pricing. It’s an issue for customers and utilities. Even though people may be connected they aren’t able to afford it. In addition, some of the subsidy schemes in Brazil mean that energy companies supply lighting and refrigerators as part of a required subsidy. But since they often supply high energy consuming products, their customers can’t pay for it, and stop using it a year after it is given through the subsidy. Energy efficiency really helps here, and IRP can be used to weigh the benefits of that. For example, a focus on rooftop solar pv could be used to sell energy back to the grid in poorer environments, which can then offset the cost of the service when it is used in the home, and can also help eliminate subsidies or tariffs over time.

A great example of this from Brazil was two separate utilities that looked at IRP holistically, considering resources including recyclable products. Because IRP was also looking at trash collection services, as one of the resources to consider, they realized that poor customers could pay their energy bill by recycling goods for cash in conjunction with the energy utility. As a result, more goods are recycled than would have been, and energy bills get paid. Interestingly, the price for recycled products is set on the energy content, and it is all done using the mobile phone.

Our group discussed how you might do this in other countries. For example, REDD+ programs for deforestation in Sierra Leone have an uncertain future due to a loss in funding. Our group discussed how to change accounting so it could use trees as a resource that could then pay for energy use.

One major question is who owns the IRP process.  In Brazil it should go to the National Energy Commission. But this depends on the players in the energy system. For example, in some energy markets the private sector utilities might be best positioned to champion IRP, if government has issues with corruption or inefficiency.

IRP is ultimately conceptual. It won’t fit everything but it is a good approach for initial mapping, and it changes the focus from one that only talks about technology to a focus that also considers the influences around a given energy technology, helping eliminate technology bias that is sometimes common in government evaluations.

IRP has challenges getting data, and dealing with trends. From the planning perspective there is  have a power balance issue, for example, in Brazil, there are serious influences for the supply side, as the hydropower sector is very powerful.

One question is who makes the call for the mix of energy use versus resource recovery. Starting with the right criteria is needed from the beginning, and it often times requires feedback from many different stakeholders. This takes time. Multi-criteria decision making assigns weights that the regulator then chooses to prioritize one effort over another.  For more equity, you have to have civil society absolutely engaged, as they can better represent the needs of energy customers with less social capital. For example, In South Africa, NGOs get trained to do IRP. If you target groups that can serve as multipliers, that can be a good strategy.

But it also sheds a light on a different part of this discussion: TVs and refrigerators are often times the first things that populations want when they get energy access. But perhaps there is a time when a call should be made to prioritize one energy approach over another.

The IRP approach sometimes brings out the need for soft support, for example, teaching people on usage, changing values etc. One example of this was a solar and diesel plant in the Amazon which ran well, but then users began to use refrigerators, which pushed the need for diesel power. To overcome this, they looked at replacing refrigerators and build an ice factory that could use solar power instead, but the challenge was that refrigerators had such a strong cultural link, which would require more of the soft side of engagement.

At the same time, IRP is only as good as those that use it. For example, South Africa, by law, is supposed to use IRP, but in our meeting people stated that in practice, the result is that the choice comes down to bringing on whatever ESCOM the utility wants. IRP may still help with thinking that through, so even in this case, South Africa has made some decisions that show its influence.

One issue that was also found in Brazil is that planners are not always interested in overall savings. They don’t do planning to provide for undeserved people. IRP is a different way to consider supply, thinking about how to alter where resources go, using the same energy supply and giving it to different groups. But the concept is still tough to grasp, because planners are often thinking about how to get more kilowatts into an energy system, not how to use what they have more efficiently.

In addition to being a fellow at WRI, Jannuzzi is also the Executive Director of the International Energy Initiative , a Southern-conceived, Southern-led and Southern-located South-South-North partnership.

If you’d like to join us at a future Energy Engagement Series event in the US, join our mailing list by clicking here. Next month’s event will be on how health centers and schools can be used to bring energy into communities that otherwise wouldn’t have access.

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